Smart-Home Appliances Have Hit The Market — Will Consumers Buy In?

LG’s SmartThinQ smart refrigerator has a Food Manager function to aid with shopping.

If this year’s CES and SXSW Interactive are any indication, I might suggest that the convergence of home appliances and technology won’t just shake things up; it will introduce a new dimension of customer experience.

In this era of smart-home devices, smart-home appliances, smart everything, if being “smart” equates to a better experience, consumers should be lined up and ready to adopt the technology. The reality is, smart-home adoption is ramping, but hits only 17 percent in the U.S. Of the population of adopters, McKinsey reports that only 15 percent of smart-home purchases are made to replace home appliances like dishwashers, washing machines, refrigerators, and ranges. So how do home appliances brands fare? Well, for starters, the answer lies beyond intuition and market trends. This is especially true when it comes to investing in the development and marketing of new technology-enabled functionality. For the average home appliance brand fighting the daily share battle, the key to fighting and winning lies with consumer wants and needs — and those aren’t always in sync with the latest technology.

Consumers Care More About Basic Functionality Than Versatility

To cultivate a brand that is not only considered but preferred, brands must start with a well-lit view of what’s important to consumers. The Brand Edge Index, a study led by Hill Holliday’s research arm, Origin, was designed to zero in on consumer motivation and to identify why some brands are owning the category while others are struggling to get noticed. What I learned is that while new functionality and versatility (like that made available by smart appliances) may ultimately increase the user experience, the functionality that consumers evaluate when considering a home appliance purchase is quite rudimentary.

For brands, this means that above touting smart appliance features, they must excel in fulfilling the essential, basic functions. Sounds obvious, right? But sometimes we marketers can’t see the trees in the woods of our own making. Greg Truex, senior director of the at-home practice at J.D. Power, remarked in a recent study: “High-performing brands continue to deliver on key performance measures of the customer experience such as performance and reliability, [and] ease of use.” It’s critical for brands in noisy categories to deliver on what Truex has described, especially today, when consumers have an abundance of choice and are more likely than ever to outright reject brands that disappoint them. In fact, our study found that consumers are 140 percent more likely to reject a brand that is perceived to be unreliable, whether or not it actually is. Translation: I don’t care how smart my dishwasher is if there’s still spaghetti sauce on my plate after a wash cycle.

Reliability Is Paramount

Be reliable. That’s what consumers are saying when it comes to home appliances. According to the more than 5,600 consumers surveyed in the Brand Edge Index, what they want most isn’t more functionality, it’s reliability in performing the most basic of functions. Take for example the dishwasher category. Maytag and GE are two great examples of dishwasher brands that consumers know to be reliable and they have a high level of consumer preference to show for it.

Align "Smart" With Essential

To be clear, this isn’t a call to abandon the evangelism of smart appliance functionality in favor of traditional functionality. Research shows that brands who want to maximize investments in smart appliance technologies should focus on developing features and functionalities that align with the existing functionalities that matter most to consumers. In a report released by Mintel last year entitled Major Household Appliances, U.S., two of the key findings spoke to this in terms of where consumers will put their money: “56 percent of consumers are willing to pay more for a higher energy-efficient washing machine while ... only 11 to 12 percent of consumers are willing to pay more for a washing machine with smart appliance features that include diagnosing service issues, monitoring and controlling use via mobile-device.” The introduction of newer, smarter features doesn’t necessarily translate to preference, but it certainly doesn’t hurt if they enhance essential functionality, product reliability, or efficiency.

Know Where Your Brand Falls Short

Few home appliance brands have the necessary resources to conduct a sweeping overhaul of its brand and products. Consequently, brands should prioritize understanding consumer preferences and take an honest assessment of how they’re delivering on consumer expectations. In some cases brands may be surprised by what they learn from consumers and in other cases the findings may affirm existing assumptions on what consumers want. Consumer learnings and affirmations are critical for brands, and for some are the ticket to breaking away from the competition in a noisy category like home appliances. If the benefit of reliability is brand preference, then the risk of unreliability is brand rejection and lost customers — something brands can’t afford to ignore.